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LONDON, Oct 26 (Reuters) – KPMG [KPMG.UL], one of the world’s biggest accountancy groups, is being investigated by UK regulators over its audits of BAE Systems (BAES.L) relating to commissions paid by the defence firm to secure contracts.

Audits covering the 10 years between 1997 and 2007 will be investigated, as well as “commission payments paid by BAE”, Britain’s Accountancy and Actuarial Discipline Board (AADB) said in a statement posted on its website on Monday.

“The AADB has begun an investigation under its accountancy scheme into the conduct of KPMG Audit plc as auditors to BAE Systems plc,” the regulator said.

Europe’s largest defence contractor in February reached a deal to pay about $450 million in fines to settle long-running corruption investigations in the United States and Britain over payments made to clinch arms deals.

A KPMG spokesman said “the firm does not believe there has been any act of misconduct” and that “it will be cooperating fully with the AADB to ensure that the matter is brought to a swift conclusion.”

AADB said it would investigate KPMG’s advice to BAE on the operations of three of its offshore companies, Red Diamond Trading, Poseidon Trading Investments and Novelmight.

“The regulator is looking specifically at the audit of commissions paid by BAE to outside agents, any tax advice given by KPMG on commission payments and the status of three offshore companies linked to BAE … penalties could include an unlimited fine for KPMG,” said Credit Agricole analyst Thomas Mesmin.

The fines ended years of corruption investigations by Britain’s Serious Fraud Office and the U.S. Department of Justice into BAE deals to sell Tornado fighter jets to Saudi Arabia and radar systems to Tanzania.

“The AADB has not indicated to BAE Systems that it has any basis for reaching a view that there is any material inaccuracy in any of the company’s accounts,” BAE said in a statement.

Shares in BAE, which have risen 12 percent in the last three months, were 1.2 percent down at 350.10 pence by 0820 GMT, underperforming the broader market and valuing the company at around 12.2 billion pounds ($19.20 billion).

http://www.domybooks.ie/wp-content/uploads/2017/10/logo.png00adminhttp://www.domybooks.ie/wp-content/uploads/2017/10/logo.pngadmin2010-10-27 02:52:422010-10-27 02:52:42KPMG to be investigated by AADB over BAE Systems audits